hereunder, the Company shall pay to the Executive a base salary (the “Salary”) of$290,000 per year with increases, if any, as may be approved by the Board of Directors or theCompensation Committee of the Board. The Salary shall be payable in accordance with the customarypayroll practices of the Company as the same shall exist from time to time. In no event shall theSalary be decreased during the Employment Term.     Section 5. Bonus. During the Employment Term, in addition to Salary, the Executiveshall be eligible to participate in the executive variable incentive plan or such other bonus plansas may be adopted from time to time by the Board of Directors or the Compensation Committee of theBoard for officers of the Company (the “Bonus”) for each such fiscal year ending during theEmployment Period; provided that, unless the Board of Directors or the Compensation Committee ofthe Board determines otherwise, the Executive must be employed on the last day of each fiscalquarter or year, as of which the Bonus is determined under any bonus plan, in order to receive theBonus attributable to such fiscal quarter or year. The Executive’s entitlement to the Bonus forany particular fiscal quarter or year shall be based on the attainment of performance objectivesestablished by the Board of Directors or the Compensation Committee of the Board in any such bonusplan, and the Executive’s target Bonus for 100% achievement of performance objectives under suchbonus plan shall be 40% of base Salary. The Executive’s participation in the 2009 executivevariable incentive plan shall be effective as of the beginning of employment on a prorated basis.(a) Stock Options.     (1) The Executive shall be granted on the date established by the CompensationCommittee per the date of the Resolution for the Option (the “Grant Date”)a Non-Qualified Stock Option to acquire 130,000 shares of Common Stock of the ParentCorporation under the Parent Corporation’s 2005 Stock Incentive Plan (the “2005Plan”) at an exercise price equal to the Fair Market Value (as defined in the2005 Plan) of one share of Common Stock on the Grant Date; such option to becomeexercisable, on a cumulative basis, with respect to 25% of the shares covered bysuch option on the first anniversary of the grant date, and with respect to 6.25% ofthe shares covered by such option on the last day of each calendar quarterthereafter, provided that the Executive has been continuously employed by orproviding service to the Company through, each such date; and such option to expireseven years from the Grant Date. All of the terms and conditions relating to theoption, including the vesting and expiration dates, are set forth in the StockOption Certificate, dated the Grant Date, evidencing such option.     (b) Relocation Expenses. The Executive will be eligible for the Company’sstandard relocation benefits, which include, movement of household goods, up to 12 monthstemporary housing if needed, closing costs on the purchase of a home in Minnesota, and otherbenefits as set forth in the Relocation Program provided to the Executive. Additionally,the Executive will receive reimbursement of up to $49,100 (gross) on loss on sale of hiscurrent home, if applicable.
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     (c) Benefits. Except as otherwise provided in this Agreement, in addition tothe Salary and Bonus, if any, the Executive shall be entitled during the Employment Term toparticipate in medical, dental, life and disability insurance programs and other benefitprograms provided to officers of the Company on terms no less favorable than those availableto the officers of the Company. The Executive shall also be entitled to twenty seven (27)paid-time-off days, same number of holidays and other benefits as are generally allowed toother senior executives of the Company in accordance with the Company’s policies in effectfrom time to time.     (d) Exclusivity. During the Employment Term, the Executive shall devote hisfull time to the business of the Company and its subsidiaries, shall faithfully serve theCompany and its subsidiaries, shall use his best efforts to promote and serve the interestsof the Company and its subsidiaries and shall not engage in any other business activity,whether or not such activity shall be engaged in for pecuniary profit, except that theExecutive may (i) participate in the activities of professional trade organizations relatedto the business of the Company and its subsidiaries, (ii) engage in personal investingactivities and (iii) serve on the board of directors of not more than two (2) othercompanies whose businesses are not in competition with the business interests of theCompany, and which have been approved by the Chief Executive Officer, provided that theactivities set forth in these clauses (i), (ii) and (iii), either singly or in theaggregate, do not interfere in any material respect with the services to be provided by theExecutive hereunder.     (e) Reimbursement for Expenses. During the Employment Term, the Executive isauthorized to incur reasonable expenses in the discharge of the services to be performedhereunder, including expenses for travel, entertainment, lodging and similar items inaccordance with the Company’s expense reimbursement policy, as the same may be modified bythe Company from time to time. The Company shall reimburse the Executive for all suchproper expenses upon presentation by the Executive of itemized accounts of such expendituresin accordance with the financial policy of the Company, as in effect from time to time.Section 6. Termination and Default.     (a) Death. The Executive’s employment shall automatically terminate upon hisdeath and upon such event, the Executive’s estate shall be entitled to receive the amountsspecified in Section 6(e) below.     (b) Disability. If the Executive is unable to perform the duties required ofhim under this Agreement because of illness, incapacity, or physical or mental disability,the Employment Term shall continue and the Company shall pay all compensation required to bepaid to the Executive hereunder, unless the Executive is disabled such that the Executivewould be entitled to receive disability benefits under the Company’s long-term disabilityplan, or if no such plan exists, the Executive is unable to perform the duties required ofhim under this Agreement for an aggregate of 180 days (whether or not consecutive) duringany 12-month period during the term of this Agreement, in which event the Executive’semployment shall terminate.
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     (c) Cause. The Company may terminate the Executive’s employment at any time,with or without Cause. In the event of termination pursuant to this Section 6(c) for Cause(as defined below), the Company shall deliver to the Executive written notice setting forththe basis for such termination, which notice shall specifically set forth the nature of theCause which is the reason for such termination. Termination of the Executive’s employmenthereunder shall be effective upon delivery of such notice of termination. For purposes ofthis Agreement, “Cause” shall mean: (1) the Executive’s failure (except where dueto a disability contemplated by subsection (b) hereof), neglect or refusal to perform hisduties hereunder which failure, neglect or refusal shall not have been corrected by theExecutive within 30 days of receipt by the Executive of written notice from the Company ofsuch failure, neglect or refusal, which notice shall specifically set forth the nature ofsaid failure, neglect or refusal, (2) any willful or intentional act of the Executive thathas the effect of injuring the reputation or business of the Company or its affiliates inany material respect; (3) any continued or repeated absence from the Company, unless suchabsence is (A) approved or excused by the Chief Executive Officer of the Company or (B) isthe result of the Executive’s illness, disability or incapacity (in which event theprovisions of Section 6(b) hereof shall control); (4) use of illegal drugs by the Executiveor repeated drunkenness; (5) conviction of the Executive for the commission of a felony; or(6) the commission by the Executive of an act of fraud or embezzlement against the Company.     (d) Resignation. The Executive shall have the right to terminate hisemployment at any time by giving notice of his resignation.     (e) Payments.          (1) In the event that the Executive’s employment terminates for any reason, theCompany shall pay to the Executive all amounts and benefits accrued but unpaidhereunder through the date of termination in respect of Salary or unreimbursedexpenses, including accrued and unused paid-time-off days.          (2) In the event of the Executive’s Termination of Employment (defined below)by the Company without Cause, whether during or upon expiration of the then currentterm of this Agreement, and Executive executes within thirty days followingTermination of Employment (and does not revoke within the relevant statutoryperiods) a Release and Separation Agreement in the form provided by the Company,then in addition to the amounts specified in Section 6(e)(1), (i) the Company shallcontinue to pay the Executive his Salary (less any applicable withholding or similartaxes) at the rate in effect hereunder on the date of such termination periodically,in accordance with the Company’s prevailing payroll practices, until the earlier of(x) the date that is twelve (12) months after the date of such termination or (y)the date the Executive begins full-time employment with another employer (the“Severance Term”); and (ii) if the Executive elects COBRA continuationcoverage under the Company’s group medical and/or dental plans, then for each monthof the Severance Term, the Company will pay or reimburse the Executive an amountequal to the excess of (A) the portion of the monthly cost for the Executive’scoverage under the
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Company’s group health and/or dental plans that was borne by the Companyimmediately prior to the Executive’s Termination of Employment (subject to the rulefor coverage changes discussed below) over (B) the portion of the monthly cost forthe Executive’s coverage under the Company’s group health and/or dental plans thatis borne by the Company during the Severance Term. If the level of the Executive’scoverage changes during the Severance Term, as, for example, from single to familycoverage or to no coverage, the amount will be determined as if the new coveragelevel had been the level of coverage in effect immediately prior to the Terminationof Employment. Any reimbursement made under this Section 6(e)(2) shall be made onor before the last day of the calendar year following the calendar year in which theexpense was incurred. In the event the Executive accepts part-time employment orengages in his own business, including consulting activity, prior to the last dateof the Severance Term, the Executive shall immediately notify the Company and theCompany shall be entitled to reduce the amounts due the Executive under this Section6(e) by the amounts paid to the Executive in respect of such part-time employment orother business activity.          (3) Further, in the event the Executive’s Termination of Employment withoutCause by reason of the Company having notified the Executive that this Agreementwill not be extended pursuant to Section 2, the Executive shall be entitled toreceive a pro-rated amount of the Bonus in a lump sum based on the Executive’speriod of employment during the calendar year in which such termination occurs (lessany applicable withholding or similar taxes), which Bonus shall be paid followingthe end of the calendar year.          (4) Amounts owed by the Company in respect of the Salary or reimbursement forexpenses under the provisions of Section 5 hereof shall, except as otherwise setforth in this Section 6(e), be paid promptly after the expiration of any rescissionperiods contained in the release, but not more than 90 days following suchtermination.          (5) The payments and benefits to be provided to the Executive as set forth inthis Section 6(e) in the event the Executive’s employment is terminated by theCompany without Cause and shall be lieu of any and all benefits otherwise providedunder any severance pay policy, plan or program maintained from time to time by theCompany for its employees.          (6) To the extent the Executive incurs a tax liability (including foreign,federal, state and local taxes) in connection with the reimbursement under Section6(e)(2) which the Executive would not have incurred had the Executive been an activeemployee of the Company participating in the Company’s group health and dentalplans, the Company will make a payment to the Executive in an amount equal to suchtax liability plus an additional amount sufficient to permit the Executive to retaina net amount after all taxes equal to the initial tax liability in connection withthe benefit. The payment pursuant to this Section 6(e)(6) will be made within 10days after the Executive’s remittal of a written request for payment accompanied bya statement indicating the basis for and amount of the
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Executive’s tax liability, but in no event later than December 31 of the calendaryear next following the calendar year in which the related taxes are remitted to theappropriate taxing authority.          (7) Notwithstanding the foregoing, if, at the time of his or her Termination ofEmployment, the Executive is a ‘specified employee’ (defined below), and the Companyreasonably determines that any salary continuation payment due under Section 6(e)(2)constitutes deferred compensation subject to the requirements of Code Section 409A,then such payments shall be suspended and not made until on or after the first dayafter the end of the six (6) month period following the Executive’s Termination ofEmployment but in no event later than seven (7) months following Termination ofEmployment, or, if earlier, upon the Executive’s death. If any such suspendedpayment is not made within 10 days of the end of such six month period, the Companywill pay the Executive interest, equal to the applicable Federal rate in effect foreach month, from the date of Termination of Employment through the date of payment.The Executive is a ‘Specified Employee’ if on the date of his or herTermination of Employment he or she is a ‘key employee’ (defined below), of theCompany (or any other entity with whom the Company would be treated as a singleemployer under Section 414(b) or 414(c) of the Code). For this purpose, Executiveis a ‘key employee’ during the 12-month period beginning on the April 1 immediatelyfollowing a calendar year, if he or she was employed by the Company (or any otherentity with whom the Company would be treated as a single employer under Section414(b) or 414(c) of the Code) and satisfied, at any time during such precedingcalendar year, the requirements of Section 416(i)(1)(A)(i), (ii) or (iii) of theCode (applied in accordance with the regulations issued thereunder and disregardingSection 416(i)(5) of the Code). The Executive will not be treated as a SpecifiedEmployee if he or she is not required to be treated as a Specified Employee underTreasury regulations issued under Section 409A of the Code.          (8) When used in this Agreement, “Termination of Employment” means atermination of Executive’s employment relationship with the Company and allAffiliates or such other change in the Executive’s employment relationship with theCompany and all Affiliates that would be considered a “separation from service”under Section 409A of the Code. The Executive’s employment relationship will betreated as remaining intact while the Executive is on a military leave, a sick leaveor other bona fide leave of absence (pursuant to which there is a reasonableexpectation that the Executive will return to perform services for the Company or anAffiliate) but only if the period of such leave does not exceed six (6) months, orif longer, so long as the Executive retains a right to reemployment by the Companyor an Affiliate under applicable statute or by contract, provided, however, atwenty-nine (29) month period of absence shall be substituted for such six (6) monthperiod of absence where the Executive’s leave is due to any medically determinablephysical or mental impairment that can be expected to result in death or can beexpected to last for a continuous period of not less than six (6) months and suchimpairment causes the Executive to be unable to perform the duties of his or herposition of employment or any
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substantially similar position of employment. In all cases, the Executive’sTermination of Employment must constitute a “separation from service” under Section409A of the Code and any “separation from service” under Section 409A of the Codeshall be treated as a Termination of Employment. For this purpose,“Affiliate” means any entity that, together with the Company, is treated asa single employer under Code Section 414(b) or (c).     Section 7. Restrictions on Competitive Activities. The Executive acknowledges thatthe agreements and covenants contained in this Section 7 are essential to protect the value of theCompany’s business and assets and by his or her current employment with the Company, the Executivehas obtained and will obtain such knowledge, contacts, know-how, training and experience and thereis a substantial probability that such knowledge, know-how, contacts, training and experience couldbe used to the substantial advantage of a competitor of the Company and to the Company’ssubstantial detriment. In consideration of the foregoing and the other covenants and agreements ofthe Company set forth herein, the Executive agrees to the restrictions contained in this Section 7.     (a) Non-Solicitation. The Executive agrees that the Executive will not, duringthe Executive’s employment with the Company and for a period of two years following the dateof the Executive’s voluntary or the Company’s involuntary termination of the Executive’semployment with the Company (the “Restrictive Period”), directly or indirectlysolicit, or assist anyone else in the solicitation of, any of the Company’s currentemployees who worked for the Company for the purpose of hiring them, engaging them asconsultants, or inducing them to leave their employment with the Company. If the Executiveis approached by one of the Company’s employees regarding potential employment, consultationor contract, as described above during the Restrictive Period of non-solicitation, theExecutive must immediately (1) fully inform the employee or former employee of theExecutive’s non-solicitation obligation described above; and (2) refrain from engaging inany communication with the employee or former employee regarding potential employment,consultation or contract.     (b) “Company Product” means any product, product line or service that has beendesigned, developed, manufactured, marketed, sold or is under research, development, or isbeing pursued through acquisition or licensure, or has been the subject of disclosure to theCompany in response to a due diligence process by the Company, at any time during theExecutive’s employment with the Company; provided, however, that if the Executive becomesentitled to the benefits described in Section 2 of the CIC Severance Agreement, then thedefinition of “Company Product” shall mean Company Product as of immediately prior to the“change in control” as defined in the CIC Severance Agreement.     (c) “Competitive Product” means goods, products, product lines or servicesdeveloped, designed, manufactured, marketed, promoted, sold, serviced, or that are indevelopment or the subject of research by any Person that are the same or similar, performany of the same or similar functions, may be substituted for, or are intended or used forany of the same purposes as a Company Product.
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     (d) “Conflicting Organization” means any Person (including the Executive), andany parent, subsidiary, partner or affiliate of any Person, that engages in, or is about tobecome engaged in, the development, design, production, manufacture, promotion, marketing,sale, support or service of a Competitive Product.     (e) Non-Competition. The Executive agrees that the Executive will not, duringthe Restrictive Period, alone or in any capacity with another Person (e.g., as an advisor,consultant, principal, agent, partner, officer, director, shareholder, employee orotherwise), within any geographic area where the Company does business:          (1) directly or indirectly disclose to a Conflicting Organization the names orany other information regarding the Company’s customers, or, on behalf of aConflicting Organization, call on, solicit, take away, or attempt to call on,solicit, or take away any of the customers of the Company on whom the Executivecalled, or otherwise had contact on behalf of the Company, or developed knowledgeregarding the customer’s need for or use of Competitive Product(s); or          (2) seek or obtain employment with, work for, consult with, or lend assistanceto any Conflicting Organization in a capacity which is the same as or similar to theemployment capacity the Executive performed on behalf of the Company; or          (3) directly or indirectly participate in or support in any capacity themanufacture, invention, development, testing or research of any Competitive Product;or          (4) disrupt, damage, impair, or interfere with the business of the Companywhether by way of interfering with or disrupting the Company’s relationship withemployees, customers, agents, representatives or vendors.     (f) Exception. During the Restrictive Period, the restrictions contained inthis Section 7 will not prevent the Executive from accepting employment with, or providingconsulting services to, a large diversified organization with separate and distinctdivisions that do not compete, directly or indirectly, with the Company. During theRestrictive Period set forth in this Section 7, the Executive will inform any new employer,prior to accepting employment or providing consulting services, of the existence of thisAgreement and provide such employer with a copy of this Agreement.     Section 8. Trade Secrets. The Company has, and is expected to develop certainconcepts, products, processes, information, designs, ideas, policies and procedures (collectively,“Trade Secrets”) which it uses in its business which give the Company an advantage overcompetitors who do not know, understand or use these secrets. Trade Secrets include the followinginformation:     (a) information which in any way relates to the Company’s design, engineering,manufacturing or management activities, financial condition, financial operations,purchasing activities, business plans and marketing activities;
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     (b) information acquired or compiled by the Company regarding actual or potentialcustomers, including their identities, their development prospects, financial informationconcerning their business operations, identity and quantity of products or servicespurchased from the Company, and all related accounts receivable information;     (c) information concerning or resulting from the development of internal policies,procedures, standards, quality or productivity measures or tools; and     (d) any other information (in whatever form) as may, from time to time, be designatedby the Company as “Proprietary” or a “Trade Secret.”     Except as may be required by the Executive’s employment with the Company or asexpressly agreed upon by the Company in writing, the Executive agrees that he will not,during or after his employment with the Company, use or disclose any Trade Secrets or permitany person to examine or copy any Trade Secrets. If any of the above classes of informationis found by a court to not constitute Trade Secrets, such information shall constitute“Confidential Information” for purposes of this Agreement.     Section 9. Confidential Information. The Company has, and is expected to developother Confidential Information, concepts, designs, policies, and procedures having independenteconomic value from not being generally known or ascertainable by proper means which the Executivewill or may learn in the course of employment but which does not constitute Trade Secrets asdescribed above. For purposes of this Agreement, “Confidential Information” means anyproprietary, confidential or competitively sensitive information and materials which are theproperty of or relate to the Company including, without limitation:     (a) the identity of the Company’s past, present and prospective customers, clients orbusiness contacts, and all documents, information and materials which concern or relate tosuch customers, clients or business contacts;     (b) marketing, sales, and advertising information; marketing and sales techniques,strategies, efforts and data; business plans and product development and delivery schedules;market research and forecasts;     (c) organizational information, such as personnel and salary data, merger, acquisitionand expansion information; information concerning methods of operation; divestitureinformation, and competitive information pertaining to the Company’s distributors;     (d) technical information such as product specifications, compounds, formulas,improvements, discoveries, developments, designs, inventions, techniques, and new products;     (e) information disclosed to the Executive as part of any specialized, proprietarytraining process; and     (f) information of third parties provided to the Executive subject to non-disclosurerestrictions for use in the Executive’s business for the Company.
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     Except as may be required by the Executive’s employment with the Company or asexpressly agreed upon in writing by the Company in writing, the Executive agrees that hewill not, during or at any time after his employment with the Company, use or disclose anyConfidential Information or permit any person to examine, copy or otherwise receive anyConfidential Information.Section 10. Inventions.     (a) “Inventions” means any inventions, discoveries, improvements and ideas,whether or not in writing or reduced to practice and whether or not patentable orcopyrightable, made, authored or conceived by the Executive, whether by his individualefforts or in connection with the efforts of others, and that either (i) relate in any wayto the Company’s business, products or processes, past, present, anticipated or underdevelopment, or (ii) result in any way from the Executive’s employment by the Company, or(iii) use the Company’s equipment, supplies, facilities or trade secret information.     (b) The Executive agrees that all Inventions made by you during the period of youremployment with the Company and for six (6) months thereafter, whether made during theworking hours of the Company or on the Executive’s own time, will be the sole and exclusiveproperty of the Company. The Executive will, with respect to any Invention: (i) keepcurrent, accurate, and complete records, which will belong to the Company and be kept andstored on the Company’s premises; (ii) promptly and fully disclose the existence anddescribe the nature of the Invention to the Company in writing (and without request); (iii)assign (and the Executive hereby assigns) to the Company all of his right, title andinterest in and to the Invention, any applications he makes for patents or copyrights in anycountry, and any patents or copyrights granted to the Executive in any country; and (iv)acknowledge and deliver promptly to the Company any written instruments, and perform anyother acts necessary in the Company’s opinion to preserve property rights in the Inventionagainst forfeiture, abandonment or loss and to obtain and maintain letters patent and/orcopyrights on the Invention and to vest the entire right and title to the Invention in theCompany, whether during or after the Executive’s employment with the Company.     (c) The Executive represents that, as of the date of this Agreement, you have no rightunder and will make no claims against the Company with respect to any inventions,discoveries, improvements, ideas or works of authorship which would be Inventions if made,conceived, authored or acquired by you during the term of this Agreement.     (d) To the extent that any Invention qualifies as “work made for hire” as defined in 17U.S.C. § 101 (1976), as amended, such Invention will constitute “work made for hire” and, assuch, will be the exclusive property of the Company.     (e) Pursuant to Minnesota law, this Section 10 does not apply to any invention forwhich no equipment, supplies, facility, or trade secret information of the Company was usedand which was developed entirely on the Executive’s own time, and (i) which
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does not relate directly to any business of the Company or any of the Company’s actualor demonstrably anticipated research or development, or (ii) which does not result from anywork the Executive performs for the Company.     Section 11. Injunctive Relief. Without intending to limit the remedies available tothe Company, the Executive acknowledges that in the event of a breach of any of the covenantscontained in Sections 7, 8, 9 or 10 may result in material irreparable injury to the Company or itssubsidiaries or affiliates for which there is no adequate remedy at law, that it will not bepossible to measure damages for such injuries precisely and that, in the event of such a breach orthreat thereof, the Company shall be entitled to obtain a temporary restraining order and/or apreliminary or permanent injunction, without the necessity of proving irreparable harm or injury asa result of such breach or threatened breach of Sections 7, 8, 9 or 10, restraining the Executivefrom engaging in activities prohibited by Sections 7, 8, 9 and 10 or such other relief as may berequired specifically to enforce any of the covenants in Sections 7, 8, 9 and 10.     Section 12. Representations and Warranties of the Executive. The Executive representsand warrants to the Company as follows:     (a) This Agreement, upon execution and delivery by the Executive, will be duly executedand delivered by the Executive and (assuming due execution and delivery hereof by theCompany) will be the valid and binding obligation of the Executive enforceable against theExecutive in accordance with its terms.     (b) Neither the execution and delivery of this Agreement, the consummation of thetransactions contemplated hereby nor the performance of this Agreement in accordance withits terms and conditions by the Executive (1) requires the approval or consent of anygovernmental body or of any other person or (2) conflicts with or results in any breach orviolation of, or constitutes (or with notice or lapse of time or both would constitute) adefault under, any agreement, instrument, judgment, decree, order, statute, rule, permit orgovernmental regulation applicable to the Executive. Without limiting the generality of theforegoing, the Executive is not a party to any non-competition, non-solicitation, no hire orsimilar agreement that prohibits or conflicts in any way the Executive’s employmenthereunder.     The representations and warranties of the Executive contained in this Section 12 shall survivethe execution and delivery of this Agreement and the consummation of the transactions contemplatedhereby.     Section 13. Representations and Warranties of the Company. The Company represents andwarrants to the Executive as follows:     (a) This Agreement, upon execution and delivery by the Company, will be duly executedand delivered by the Company and (assuming due execution and delivery hereof by theExecutive) will be the valid and binding obligation of the Company enforceable against theCompany in accordance with its terms.
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     (b) Neither the execution and delivery of this Agreement, the consummation of thetransactions contemplated hereby nor the performance of this Agreement in accordance withits terms and conditions by the Company (1) requires the approval or consent of anygovernmental body or of any other person or (2) conflicts with or results in any breach orviolation of, or constitutes (or with notice or lapse of time or both would constitute) adefault under, any agreement, instrument, judgment, decree, order, statute, rule, permit orgovernmental regulation applicable to the Company.     The representations and warranties of the Company contained in this Section 13 shall survivethe execution and delivery of this Agreement and the consummation of the transactions contemplatedhereby.     Section 14. Successors and Assigns; No Third-Party Beneficiaries. This Agreementshall inure to the benefit of, and be binding upon, the successors and assigns of each of theparties, including, but not limited to, the Executive’s heirs and the personal representatives ofthe Executive’s estate; provided, however, that neither party shall assign ordelegate any of the obligations created under this Agreement without the prior written consent ofthe other party. Notwithstanding the foregoing, the Company shall have the unrestricted right toassign this Agreement and to delegate all or any part of its obligations hereunder to any of itssubsidiaries or Affiliates, but in such event such assignee shall expressly assume all obligationsof the Company hereunder and the Company shall remain fully liable for the performance of all ofsuch obligations in the manner prescribed in this Agreement. Nothing in this Agreement shallconfer upon any person or entity not a party to this Agreement, or the legal representatives ofsuch person or entity, any rights or remedies of any nature or kind whatsoever under or by reasonof this Agreement.     Section 15. Waiver and Amendments. Any waiver, alteration, amendment or modificationof any of the terms of this Agreement shall be valid only if made in writing and signed by theparties hereto; provided, however, that any such waiver, alteration, amendment ormodification is consented to on the Company’s behalf by the Board of Directors or CompensationCommittee of the Board. No waiver by either of the parties hereto of their rights hereunder shallbe deemed to constitute a waiver with respect to any subsequent occurrences or transactionshereunder unless such waiver specifically states that it is to be construed as a continuing waiver.     Section 16. Severability and Governing Law. The Executive acknowledges and agreesthat the covenants set forth in Section 7 hereof are reasonable and valid in geographical andtemporal scope and in all other respects. If any of such covenants or such other provisions ofthis Agreement are found to be invalid or unenforceable by a final determination of a court ofcompetent jurisdiction (a) the remaining terms and provisions hereof shall be unimpaired and (b)the invalid or unenforceable term or provision shall be deemed replaced by a term or provision thatis valid and enforceable and that comes closest to expressing the intention of the invalid orunenforceable term or provision. This Agreement shall be governed by and construed in accordancewith the laws of the state of Minnesota applicable to contracts made and to be performed entirelywithin such state**.**     Section 17. Notices.
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     (a) All communications under this Agreement shall be in writing and shall be deliveredby hand or mailed by overnight courier or by registered or certified mail, postage prepaid:     (1) If to the Executive, at 6 Tarbell Road, Windham, New Hampshire, 03087 or atsuch other address as the Executive may have furnished the Company in writing, and     (2) If to the Company, at 10700 Bren Road West, Minnetonka, Minnesota 55343,marked for the attention of Senior Vice President, Human Resources, or at such otheraddress as it may have furnished in writing to the Executive.     (b) Any notice so addressed shall be deemed to be given: if delivered by hand, on thedate of such delivery; if mailed by courier, on the first business day following the date ofsuch mailing; and if mailed by registered or certified mail, on the third business day afterthe date of such mailing.     Section 18. Section Headings. The headings of the sections and subsections of thisAgreement are inserted for convenience only and shall not be deemed to constitute a part thereof,affect the meaning or interpretation of this Agreement or of any term or provision hereof.     Section 19. Entire Agreement. This Agreement, including the Stock OptionCertificates, and the CIC Severance Agreement constitutes the entire understanding and agreement ofthe parties hereto regarding the employment of the Executive. This Agreement supersedes all priornegotiations, discussions, correspondence, communications, understandings and agreements betweenthe parties relating to the subject matter of this Agreement.     Section 20. Survival of Operative Sections. Upon any termination of the Executive’semployment, the provisions of Sections 6(e) and 7 through 21 of this Agreement shall survive to theextent necessary to give effect to the provisions thereof.     Section 21. Counterparts. This Agreement may be executed in one or more counterparts,each of which shall be deemed an original and all of which together shall be considered one and thesame agreement. Facsimile execution and delivery of this Agreement shall be legal, valid andbinding execution and delivery for all purposes.
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     IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first abovewritten.      AMERICAN MEDICAL SYSTEMS, INC.